Legislature(2017 - 2018)Anch LIO Conf Rm
07/12/2017 03:00 PM House CONFERENCE COMMITTEE ON HB111
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| Audio | Topic |
|---|---|
| Start | |
| HB111 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 111 | TELECONFERENCED | |
HB 111-OIL & GAS PRODUCTION TAX;PAYMENTS;CREDITS
3:08:35 PM
CHAIR TARR announced that the only order of business would be
HOUSE BILL NO. 111, "An Act relating to the oil and gas
production tax, tax payments, and credits; relating to interest
applicable to delinquent oil and gas production tax; and
providing for an effective date." [Before the committee were
the CSHB 111(FIN) and SCS CSHB 111(FIN).]
CHAIR TARR stated that the conference committee operates under
Uniform Rule 42. She explained that the Conference Committee on
HB 111 was meeting in two locations (in Anchorage, Alaska, and
via teleconference in Juneau); therefore, she would lead the
discussion pertaining to CS FOR HOUSE BILL NO. 111(FIN)(efd
fld), while Chair Giessel would lead the discussion pertaining
to SENATE CS FOR CS FOR HOUSE BILL NO. 111(FIN).
3:09:47 PM
SENATOR STEDMAN expressed concern about procedure. He said it
is standard to address a bill that was in existence in the
previous session or special session. He relayed that today the
Senate had convened and passed a resolution by two-thirds vote
to take up HB 111. He offered his understanding that the House
would have to convene and decide by a two-thirds vote to bring
its version before the Conference Committee on HB 111.
3:10:52 PM
CHAIR TARR responded that she and Chair Giessel had addressed
the issue through conversation, and she offered her
understanding that Chair Giessel had not indicated any
hesitation in moving forward with a plan to discuss two versions
today: Version F and Version X. She indicated she had not
since been made aware by Chair Giessel of the desire to follow
any other procedure. Furthermore, Chair Tarr stated that she
possessed a legal memorandum ("memo") from Doug Gardner, the
director of Legal Services, which indicates that "all of the
actions that we're taking today are acceptable."
SENATOR STEDMAN opined that elected officials have the
responsibility to explain to the public what they are doing and
why, which includes explaining the reason for deviating from the
rules. That transparency promotes public support in a process
that can be followed and understood. In response to an offer
from Chair Tarr to take an at-ease, he stated that he would like
an explanation of the process she intends to follow. He said
the Uniform Rules set out the process by which conference
committees operate, and any deviation from that is fine, but
should be explained. He said he is aware of the conversations
that the two chairs have had, but he reiterated that the public
deserves to be given an explanation of the process and any
deviation from it.
CHAIR TARR responded that the Conference Committee on HB 111 is
operating as other conference committees do. At this point it
does not have "powers beyond the powers of a regular conference
committee," which means that its consideration of HB 111 is
limited to language currently in the latest House and Senate
versions of the bill. She offered her understanding that
Senator Stedman, having been involved in the meetings of the
last few weeks, would be aware of the extensive conversations
that had taken place to determine "points of agreement." She
said Chair Giessel had requested Version F, while she had
requested Version X, and she indicated that both versions
include points upon which both bodies have agreed or "think
there might be agreement," as well as "the five sections that
remain for discussion." She stated that she is prepared to move
on with the plan, which she discussed with Chair Giessel this
morning; however, if that is not what all members wish to do,
she would consider adjourning the meeting.
3:14:07 PM
REPRESENTATIVE JOSEPHSON read a sentence from the aforementioned
memo from Doug Gardener, dated July 11, 2017, as follows:
There is no legal impediment to the conference
committees meeting and the houses ultimately convening
on the floor to consider adopting the conference
committee substitute, passing a concurrent resolution,
prior to voting on adoption of the conference
committee report.
REPRESENTATIVE JOSEPHSON said he thinks it is clear that "no
one's talking about advancing a bill today." He characterized
the current conference committee meeting as "a sort of
preliminary meeting to go over the versions of the bill."
Further, he offered his understanding that "the top mind in our
legal department says it's entirely appropriate for us to do
this" and, he added, "that's what we're doing."
3:15:05 PM
CHAIR GIESSEL explained the procedure outlined in the Uniform
Rules wherein a concurrent resolution is passed by each body to
bring alive a bill that died in a previous session and
legitimizes the conference committees that were appointed during
a previous session. She opined that Senator Stedman's request
for an explanation was straight forward. She offered her
understanding that in his legal memorandum, Mr. Gardner had
opined that the legislature can waive its own rules; therefore,
it is okay for the current Conference Committee on HB 111 to
proceed in bringing forward a bill that died in a previous
session. She reviewed that today the Senate had passed the
concurrent resolution to bring the bill back to life and
legitimized the appointees to the Conference Committee on HB
111.
3:17:15 PM
CHAIR TARR asked Senator Stedman if he wanted the Conference
Committee on HB 111 meeting to proceed or [adjourn].
SENATOR STEDMAN reiterated his point that the Senate had passed
the resolution, but the House had not done so; therefore, a
discussion can take place today, but no action can be taken. He
expressed doubt that the House would have the necessary two-
thirds vote that would be required to bring forward the proposal
that is in front of the committee. He reiterated the need to
share with the public the reason for any deviation from the
rules.
CHAIR TARR explained the House does not want to spend public
dollars to send its legislators [back] to Juneau until an
agreement has been reached. She mentioned that a news station
has been keeping a tally of the cost of the ongoing special
session. She noted that the Senate had gone to Juneau and
conducted a floor session to pass the aforementioned concurrent
resolution. She said the House decided, based on the
consultation with its lawyers, that the action to move forward
today is an appropriate one, and it is not going to send its
members to Juneau "until such time as it's necessary."
3:19:59 PM
CHAIR GIESSEL introduced the offering of the Senate: Conference
Committee Substitute (CCS) for HB 111, Version 30-LS0450\F,
Nauman, 7/7/17 ("Version F"). She explained the proposed
changes outlined in the Sectional Analysis [included in the
committee packet]. She highlighted Sections 1 and 2, of the
Sectional Analysis, which read as follows [original punctuation
provided, with some formatting changes]:
Section 1 Amends AS 31.05.030(n), Alaska Oil and Gas
Conservation Act, Powers and duties of commission.
Conforming to the Sec. 27 requirement that the Alaska
Oil and Gas Conservation Commission determine the
start of regular production for purposes of applying a
carry-forward annual loss. Effective Jan. 1, 2018.
Section 2 Amends AS 43.05.225, Administration of
Revenue Laws, Interest.
For all delinquent taxes under the Department of
Revenue, interest is 5.25 points above the annual rate
set by the 12th Federal Reserve District, compounded
quarterly, and is applied the entire time a tax is
delinquent. Effective Jan. 1, 2018.
CHAIR GIESSEL noted that the current federal reserve interest
rate is 1.75 percent, and the Senate had offered 3 percentage
points above the federal rate, while the House had requested 7
percent above the federal rate. She explained that the interest
rate is for all delinquent taxes in the state, not just those
from oil and gas. The House members of the Conference Committee
on HB 111 asked for the 5.25 interest rate shown in Section 1,
which the Senate agreed to. She said that with the 1.75 federal
reserve rate, the amount would equal 7 percent.
CHAIR GIESSEL continued to Sections 3-4 of the Sectional
Analysis, which read as follows [original punctuation provided,
with some formatting changes]:
Section 3 Amends AS 43.20.044(a), Alaska Net Income
Tax Act, Exploration incentive credit.
A taxpayer that earns an exploration credit under AS
43.55.025 for work done after July 1, 2016, may apply
the credit against the taxpayer's own corporate income
tax. Effective immediately.
Section 4 Amends AS 43.20.047(h), Alaska Net Income
Tax Act, Liquefied natural gas storage facility tax
credit.
Conforming to the future repeal of the Oil and Gas Tax
Credit Fund and conforming repeals. Effective the
later of Jan. 1, 2022, or when there are no
outstanding applications for credit refunds.
Section 5 Amends AS 43.55.023(c), Oil and Gas
Production Tax, Tax credits for certain losses and
expenditures.
Credits earned under this section may be applied
against prior-year taxes, interest, penalties or fees
related to the oil and gas production tax, providing
those liabilities have not been subject to an
administrative proceeding or litigation. Credits may
not be used against conservation surcharges or the
private royalty tax. Effective immediately.
CHAIR GIESSEL stated that the Senate's intent was to provide an
opportunity for companies that have earned cash credits over the
years to begin to benefit from them. She explained that there
has been a reduction in the amount of credits that are
available.
3:23:51 PM
CHAIR GIESSEL directed attention to Sections 6-8, which read as
follows [original punctuation provided, with some formatting
changes]:
Section 6 Amends AS 43.55.023(d), Oil and Gas
Production Tax, Tax credits for certain losses and
expenditures.
Cash payments for credits under this section are
available only for lease expenditures incurred before
July 1, 2017. Effective immediately retroactive to
July 1, 2017.
Section 7 Amends AS 43.55.023(d), Oil and Gas
Production Tax, Tax credits for certain losses and
expenditures, as amended by Sec. 6.
Conforming to the future repeal in Sec. 30 of the Oil
and Gas Tax Credit Fund. Effective the later of Jan.
1, 2022, or when there are no outstanding applications
for credit refunds.
Section 8 Amends AS 43.55.023(e), Oil and Gas
Production Tax, Tax credits for certain losses and
expenditures.
Transferrable tax credit certificates issued under
this section may be applied against prior-year taxes,
interest, penalties or fees related to the oil and gas
production tax, providing those liabilities have not
been subject to an administrative proceeding or
litigation. Credits may not be used against
conservation surcharges or the private royalty tax.
Effective immediately.
CHAIR GIESSEL noted Section 6 is an amendment being offered by
the Senate, with the understanding that the credits being earned
right now equate to about $1 million a day and suspending these
credits needs to happen immediately. Over the next year, that
would equate to approximately $200 million, which would be a
significant help to Alaska's budget. She explained the reason
for the timing proposed in Section 7 is to ensure enough time to
pay out promised credits before repealing the fund from which
the payments come. Regarding Section 8, she said the credits
may not be used against liability for royalty, spill response,
or money that would go into the constitutional budget reserve.
Section 9 Amends AS 43.55.023(g), Oil and Gas
Production Tax, Tax credits for certain losses and
expenditures.
Conforming to the future repeal in Sec. 30 of the Oil
and Gas Tax Credit Fund. Effective the later of Jan.
1, 2022, or when there are no outstanding applications
for credit refunds.
Section 10 Amends AS 43.55.025(a), Oil and Gas
Production Tax, Alternative tax credit for oil and gas
exploration.
Credits under this section for work done on or after
July 1, 2016, may be applied against corporate income
taxes. Effective immediately.
CHAIR GIESSEL noted that Section 10 applies to Middle Earth,
which pertains to areas in the Interior and the Western Coast
where there are opportunities for exploration and development.
She said applying the credits to corporate income tax would
allow companies involved in exploration to reap some benefit.
She said it involves a small amount of money.
3:27:28 PM
CHAIR GIESSEL addressed Sections 11 and 12, which read as
follows [original punctuation provided, with some formatting
changes]:
Section 11 Amends AS 43.55.025(a), Oil and Gas
Production Tax, Alternative tax credit for oil and gas
exploration, as amended by Sec. 10.
Conforming to the sunset of the AS 43.55.025(a)(4)
credit after Jan. 1, 2018, in Sec. 10. Effective Jan.
1, 2018.
Section 12 Amends AS 43.55.025(b), Oil and Gas
Production Tax, Alternative tax credit for oil and gas
exploration.
The 40% credit for seismic work under AS
43.55.025(a)(4) will not be available for work done
after Jan. 1, 2018. Effective Jan. 1, 2018.
CHAIR GIESSEL, regarding Section 12, compared seismic work to
ultrasounds. She related that the Senate Finance Committee
learned that the state is receiving massive volumes of data,
related to seismic activity, which may or may not be useful to
the state; therefore, the credit needs to be repealed.
CHAIR GIESSEL moved on to Sections 13 through 18, which read as
follows [original punctuation provided, with some formatting
changes]:
Section 13 Amends AS 43.55.025(f), Oil and Gas
Production Tax, Alternative tax credit for oil and gas
exploration.
Exploration credits under AS 43.55.025 for work done
after July 1, 2016, against corporate income taxes.
Effective immediately.
Section 14 Amends AS 43.55.025(g), Oil and Gas
Production Tax, Alternative tax credit for oil and gas
exploration.
Exploration tax credits under this section that are
transferred to another taxpayer may not be applied
against the purchaser's corporate income taxes.
Effective immediately.
Section 15 Amends AS 43.55.025(h), Oil and Gas
Production Tax, Alternative tax credit for oil and gas
exploration.
Tax credit certificates and tax credits under this
section may be applied against prior-year taxes,
interest, penalties or fees related to the oil and gas
production tax, providing those liabilities have not
been subject to an administrative proceeding or
litigation. Credits may not be used against
conservation surcharges or the private royalty tax.
Effective immediately.
Section 16 Amends AS 43.55.025(i), Oil and Gas
Production Tax, Alternative tax credit for oil and gas
exploration.
Exploration credits issued under this section for work
done after July 1, 2016, may be used against corporate
income tax, but may not be used to reduce corporate
income taxes below zero. Effective immediately.
Section 17 Amends AS 43.55.025(k), Oil and Gas
Production Tax, Alternative tax credit for oil and gas
exploration.
Conforming to the sunset of the seismic credit in Sec.
12. Effective Jan. 1, 2018.
Section 18 Adds a new subsection to AS 43.55.025, Oil
and Gas Production Tax, Alternative tax credit for oil
and gas exploration.
Creates a conditional tax credit certificate that the
Department of Revenue must issue to explorers. The
conditional certificate enables the holder to submit
an application for a refund while waiting for the
state to issue a transferrable certificate, but the
conditional certificates may not be purchased by the
state. Effective immediately retroactive to July 1,
2017.
CHAIR GIESSEL, regarding Section 18, explained that there are
companies in line waiting for credit, and the State of Alaska
has been reducing the amount of money available for payment;
therefore, "as they wait, they fall further and further back in
line."
3:31:43 PM
CHAIR GIESSEL moved on to Sections 19 through 26, which read as
follows [original punctuation provided, with some formatting
changes]:
Section 19 Amends AS 43.55.028(a), Oil and Gas
Production Tax, Oil and gas tax credit fund
established; cash purchase of tax credit certificates.
The tax credit fund is only able to purchase oil and
gas tax credits issued for work done before July 1,
2017, and to purchase instate refinery and LNG storage
facility income tax credits. Effective immediately
retroactive to July 1, 2017.
Section 20 Amends AS 43.55.028(e), Oil and Gas
Production Tax, Oil and gas tax credit fund
established; cash purchase of tax credit certificates.
Allows the Department of Revenue to accept, but not
purchase, a conditional certificate from an explorer.
Effective immediately retroactive to July 1, 2017.
Section 21 Amends AS 43.55.029(a), Oil and Gas
Production Tax, Assignment of tax credit certificate.
Conforming to the Sec. 29 repeal of the net operating
loss credit. Effective Jan. 1, 2018.
Section 22 Amends AS 43.55.160(d), Oil and Gas
Production Tax, Determination of production tax value
of oil and gas.
Conforming to the Sec. 29 repeal of the net operating
loss credit. Effective Jan. 1 2018.
Section 23 Amends AS 43.55.160(e), Oil and Gas
Production Tax, Determination of production tax value
of oil and gas.
North Slope and Middle Earth lease expenditures may be
used to establish a carried-forward annual loss.
Gross value reductions for new oil cannot make a loss
larger than it would otherwise be. Also, makes
conforming changes to the Sec. 29 repeal of the net
operating loss credit and the Sec. 24 terms for lease
expenditures. Effective Jan. 1, 2018.
Section 24 Amends AS 43.55.165(a), Oil and Gas
Production Tax, Lease expenditures.
Lease expenditures include those, for the North Slope
and Middle Earth, that were unable to be deducted in
the previous year. Effective Jan. 1, 2018.
Section 25 Amends AS 43.55.165(f), Oil and Gas
Production Tax, Lease expenditures.
Conforming to the Sec. 29 repeal of the net operating
loss credit. Effective Jan. 1, 2018.
Section 26 Adds a new paragraph to AS 43.55.165(l),
Oil and Gas Production Tax, Lease expenditures.
Defines "carried-forward annual loss" as a loss
established per Sec. 23. Effective Jan. 1, 2018.
3:34:37 PM
Section 27 Adds new subsections to AS 43.55.165, Oil
and Gas Production Tax, Lease expenditures.
Implements new terms for how a carried-forward annual
loss is applied. A taxpayer may choose to apply all
or some of its loss, or to carry it forward. In
applying carry-forward annual losses, a producer
subject to the minimum tax may apply the amount that
would reduce taxes to the equal amount under the
minimum tax (before the application of any other
credits), and not to zero. Carry-forward annual
losses in excess of the amount applied to reduce taxes
to the equal of the minimum tax are carried forward.
Carry-forward annual losses may be applied only once
production starts from the property on which they were
incurred; at that time, the losses may be applied
against a taxpayer's entire segment (ie, North Slope
or Middle Earth). Effective Jan. 1, 2018.
Section 28 Amends AS 43.55.170(c), Oil and Gas
Production Tax, Adjustments to lease expenditures.
Conforming to the Sec. 29 repeal of the net operating
loss credit. Effective Jan. 1, 2018.
Section 29 Repealer
Repeals the net operating loss credit, AS
43.55.023(b), on Jan. 1, 2018.
Section 30 Repealer
At the later of Jan. 1, 2022, or when all outstanding
applications for credit refunds have been paid,
repeals the Oil and Gas Tax Credit Fund and AS
43.55.028; assignability of credits to third parties,
AS 43.55.029; and makes conforming repeals in sections
of statute referencing the fund: AS 43.05.230(l),
Administration of Revenue Laws, Disclosure of tax
returns and reports, annual disclosure of
disbursements from the fund; AS 43.20.046(e), Alaska
Net Income Tax Act, Gas storage facility tax credit,
use of fund to pay the credit; AS 43.20.047(e), Alaska
Net Income Tax Act, Liquefied natural gas storage
facility tax credit, use of fund to pay the credit;
and AS 43.20.053(e), Alaska Net Income Tax Act,
Qualified in-state oil refinery infrastructure
expenditures tax credit, use of fund to pay the
credit.
3:37:57 PM
CHAIR GIESSEL directed attention to Section 31 of the Sectional
Analysis, which read as follows [original punctuation provided,
with some formatting changes]:
Section 31 Legislative Working Group
Adds a new section to uncodified law establishing a
Legislative Working Group to analyze the state's oil
and gas fiscal regime and recommend changes to the
Second Session of the 30th Alaska State Legislature.
Articulates specific points for the working group to
analyze, specifies membership, and provides support by
the legislature's consultants now under contract.
Effective immediately.
CHAIR GIESSEL said Section 31 reflects a concession made by the
Senate to a request made by the House.
CHAIR GIESSEL brought attention to the issue of applicability,
found in Sections 32 through 34 of the Sectional Analysis, which
read as follows [original punctuation provided, with some
formatting changes]:
Section 32 Applicability
Credits under AS 43.55.025 may be applied against
corporate income taxes by the company that incurred
the credits, regardless of when the credits were
earned. Effective immediately.
Section 33 Applicability
Credits may be applied against prior year oil and gas
tax liabilities, regardless of when the credits were
earned. Effective immediately.
Section 34 Applicability
The new provisions related to lease expenditures apply
to lease expenditures incurred on or after Jan. 1,
2018. Effective Jan. 1, 2018.
CHAIR GIESSEL moved on to the issues of transition language,
retroactivity, and conditional affect, addressed in Sections 35
through 41 of the Sectional Analysis, which read as follows
[original punctuation provided, with some formatting changes]:
Section 35 Transition language
Interest rates charged on delinquent taxes for
calendar year 2017 are the rates in statute before the
changes in Sec. 2 take effect on Jan. 1, 2018.
Effective Jan. 1, 2018.
Section 36 Transition language
Ensures the public disclosure of tax credit refund
recipients is made on April 30 of the year following
the year in which the Oil and Gas Tax Credit Fund is
repealed, as the public disclosure is also repealed to
conform. Effective the later of Jan. 1, 2022, or when
there are no outstanding applications for credit
refunds.
Section 37 Transition language
Taxpayers who incur a loss before Jan. 1, 2018, remain
eligible for the net operating loss credit in current
statute that is repealed as of Jan. 1, 2018.
Effective immediately.
Section 38 Transition language
Taxpayers who incur a loss before the Jan. 1, 2018
repeal of the net operating loss credit may apply for
a net operating loss credit. Effective Jan. 1, 2018.
Section 39 Transition language
When the Oil and Gas Tax Credit Fund is repealed after
outstanding applications have been paid, any balance
of the fund lapses into the general fund. Effective
the later of Jan. 1, 2022, or when there are no
outstanding applications for refunds.
Section 40 Transition language
Dept. of Revenue may adopt regulations retroactively.
Effective immediately.
Section 41 Retroactivity
Sections related to the eligibility of credits for
cash refunds are retroactive to July 1, 2017.
Effective immediately.
Section 42 Conditional effect, notification language.
Effective immediately.
Sections related to the repeal of the Oil and Gas Tax
Credit Fund take effect only after the Commissioner of
Revenue notifies the revisors when there are no
outstanding applications for the purchase of tax
credits, and it has been at least one year since an
application has been received. Effective immediately.
3:41:08 PM
CHAIR GIESSEL highlighted effective dates, as shown in Sections
43-46 of the Sectional Analysis, which read as follows [original
punctuation provided, with some formatting changes]:
Section 43 Effective date
Sets an immediate effective date for sections related
to the ability to use Middle Earth exploration credits
against the company's own corporate income tax
liability, and to use credits against prior year tax
liabilities that have not been subject to an
administrative proceeding or to litigation. Also,
sets an immediate effective date for sections
retroactively changing the eligibility for cash
credits.
Section 44 Effective date
Sets a Jan. 1, 2018, effective date for Section 24,
which is treated separately because it makes changes
to a section of statute that is undergoing other
changes this year based on House Bill 247 of 2016.
Section 45 Effective date
Sets an effective date of the later of Jan. 1, 2022,
or Jan. 1 of the year in which notice is provided that
all outstanding applicants for credit purchases have
been paid, for the repeal of the Oil and Gas Tax
Credit Fund and conforming sections.
Section 46 Effective date
Sets a Jan. 1, 2018 effective date for all other
sections.
3:41:49 PM
CHAIR GIESSEL said tax policy is complex, which is why it takes
so long for it to be written, and she emphasized the importance
of all legislators understanding it.
3:42:11 PM
CHAIR TARR announced the discussion would now turn to the
offering of the House: Conference Committee Substitute (CCS)
for HB 111, Version 30-LS0450\X, Nauman, 7/10/17 ("Version X").
She noted the following related publications available in the
committee packet: a Sectional Analysis, a one-page summary, and
a page with three columns, which compares the House and Senate
versions along with a list of compromises. She indicated that
the three-column page illustrates that very few changes
recommended by the House have been incorporated, which means
significant concessions have been made by members of the House,
including: not changing the statutory tax rate to 25 percent;
not changing the interest rate to 7 percent; weaker ring fencing
language; elimination of new transparency language; removal of
language that ended the per barrel credit; removal of adjustment
to GVR; removal of conversation to the PPV brackets; and removal
of progressivity at higher prices.
CHAIR TARR directed attention to the one-page summary of Version
X and pointed out some specific sections. She specified that
Sections 1, 23, 24, 26, 27, 34, and 44, in Version F, pertained
to carry-forwards, and they were incorporated into Version X in
Sections 21, 22, 23, 24, and 25. She stated that the House
majority considers [HB 111] a critical piece of legislation in
determining the state's fiscal plan. She reviewed that Alaska
currently has a multibillion dollar deficit, and to date the
legislature has "drained the savings account" - the
Constitutional Budget Reserve (CBR); therefore, the one
remaining fund is the Alaska Permanent Fund. She stated that
every dollar not earned through a reasonable oil tax "puts more
pressure on use of the [permanent fund dividend] (PFD) for state
government."
3:45:20 PM
CHAIR TARR stated that the agreement [between the House and the
Senate] is on ending cash credits. She said Alaska is the only
place in the world that offers the cash credits, and the program
is not working. She related that the state has more than a
billion-dollar obligation in cash credits currently, and
Governor Bill Walker has vetoed payments of those cash credits
over the last few years, because the state cannot afford to pay
them at this time; she indicated that the state is, instead,
paying the statutory minimum. She said, "We have admitted and
talked about how this has been unstable and bad for business,
and that is what has motivated us to correct the system today."
CHAIR TARR noted the point of disagreement is in determining
what will replace the cash credits. She said the Senate's
Version F would maintain a status quo system by eliminating cash
credits but allowing for carry-forward losses at the same
statutory rate currently allowed. She said that is problematic
for House members, because the current tax system has an
artificially high statutory tax rate at 35 percent. She the tax
calculation includes allowing lease expenditure deduction,
transportation deduction, and the addition of a per barrel
credit. The effective tax rate currently paid in Alaska varies
between 8 and 12 percent; the statutory tax rate is 35 percent.
She explained, "What that means is when they apply their losses,
they're applying them at about 20 percent more than they
actually pay in taxes." Chair Tarr said House majority members
view switching from one unaffordable system to another
problematic. She opined that if stability in the oil industry
is the goal, then the State of Alaska must offer incentives that
it can afford.
CHAIR TARR said fiscal notes that accompanied the versions of HB
111 that passed the House and Senate at the end of the regular
session [of 2017] show more than a $20 million difference by
2027, and she questioned whether that is affordable and
sustainable. Not paying credits to the industry has caused "a
domino effect in the industry that has been bad for business."
She reiterated that the idea to use a carry-forward loss system
as a deduction on future taxes concerns [House majority
members]. Further, she said the repetitively changing oil taxes
every year will also be bad for business, which she said efforts
have been made to resolve "that point of disagreement." She
emphasized that that resolution of disagreement has not yet been
reached.
3:48:35 PM
CHAIR TARR reiterated that [the House majority] does not want to
put into a place a program that allows an additional 20 percent
to be earned as losses, because it thinks it is not fiscally
responsible or sustainable. She said, "We also want to be
mindful of how this fits into the overall need for a fiscal plan
and try to figure out how we will maintain essential services."
She said historically the state's oil tax revenue has
significantly funded state services; however, in the low-price
environment that [tax revenue] has been reduced substantially to
the point where it covers a much smaller portion of the state's
expenses. She said the state has used savings to pay the
difference over the last few years. She reiterated that now all
that is left is the permanent fund. She emphasized the House
majority's commitment to maintaining the permanent fund dividend
for the people of Alaska. She said in the past oil was $94 a
barrel; the low point was $27 a barrel; and for the last couple
years, the price has been hovering around $50 a barrel. She
indicated that the news announced a few weeks ago that Alaska
hit a nine-month low and the price was in the low forties. She
said not having a tax system that works well in a low-price
environment has been motivation to create a sustainable plan.
3:50:30 PM
CHAIR TARR mentioned a one-page summary, which she said
describes the point of disagreement. She said Version X would
end cash credits; however, an agreement needs to be reached as
to what would replace them. She said there are just a few days
left in the Second Special Session. She said "we" believe
putting an effective date in place would force the legislature
to continue working on the issue. She stated, "There is no
intention on the part of the House that that program would be
eliminated altogether." The intent is to set up a program the
state can afford. She said she thinks anyone in the industry
would say that "not being able to offer the incentive is just
like having no incentive at all." She reiterated the concern
that Alaska could become less attractive to investors if it
continues to address this issue perennially.
CHAIR TARR pointed to the second bullet point on the summary
page. She said [the House majority] is concerned about the July
1 date proposed by the Senate, because consultants and the
Department of Revenue (DOR) have cautioned that mid-year tax
changes can be problematic. She said [the House majority] is
"approaching" the July 1 recommendation "cautiously." She said
DOR has suggested a way that this can be accomplished by
allowing the losses to be calculated for the year: the first
six months of losses would be eligible for cash credits and the
last six months would be carry-forward losses.
CHAIR TARR acknowledged the work of Legislative Legal and
Research Services.
3:56:49 PM
SENATOR STEDMAN offered his understanding that contrary to Chair
Tarr's comment about the lack of funds in the CBR, that reserve
has approximately $2 billion in it. He said he does not want
the public to think "the only thing is left is the permanent
fund and we've liquidated everything in sight." He said there
is also a billion dollars in the fund used for energy relief, as
well as "some other miscellaneous funds sloshing around." He
suggested a clarification be made for the public.
3:57:52 PM
KEN ALPER, Director, Tax Division, Department of Revenue (DOR),
in response to Senator Stedman's remarks, relayed that the
balance of the CBR at the end of June 2017 was approximately
$4.5 billion; the deficit in the budget that was passed by the
legislature and signed by the governor on June 30, 2017, was
approximately $2.5 billion, and it will be paid for out of the
CBR; forecasts show there will be approximately $2 billion left
at the end of the current fiscal year, next June 2018,
"presuming the price and production of oil meet our forecast."
He emphasized that the amount in the CBR a year from now will
not be sufficient to pass a budget with a similar size deficit,
and this creates an urgency for the legislature to find a long-
term solution to the fiscal problem.
3:59:25 PM
SENATOR GIESSEL stated that during the period of January through
May 2017, $70 million went into the CBR from royalties and $843
million went into "total take." Of the total take, $615 went
into the general fund (GF); $251 went into the permanent fund;
and $1.7 million went into the school fund. She indicated that
Version F reflects the Senate's focus on continued production,
because royalty values are significant. She said $58.3 million
in the month of May alone in royalties is a huge number.
MR. ALPER explained how money gets into the CBR. Under the
Alaska State Constitution, money that results from an
administrative proceeding or some sort of legal action, such as
a lawsuit or audit - when the state gets a settlement on past
taxes or past royalty - is put in the CBR. He said the original
billions of dollars that went in to the CBR were settlements
from large royalty lawsuits from the 1970s, '80s, and early
'90s. He said Senator Giessel referred to additional payments
that came in from proceedings. He offered an example. He said
typically the division forecasts about $100 million per year of
new money going into the CBR. Because of a couple large
settlements related to the Federal Energy Regulatory Commission
(FERC), the amount put in the CBR in fiscal year 2017 (FY 17)
was over $300 million.
4:03:03 PM
SENATOR OLSON asked Mr. Alper "what kind of optimism" he could
give the public in terms of either Version F or Version X.
MR. ALPER said he is encouraged by the points of agreement
between the two versions. He said most of the sections in the
two versions are in accord, and the two bodies have reached
compromise on what many may consider "secondary provisions of
the bill," such as the ability to use credits against prior year
taxes, the linkage in corporate income tax of Middle Earth
exploration credits, and the consensus on interest rate. Most
important, he indicated, is that either version will move the
state away from cash credits. He said, "That's a program that
however wise it might have been ten years ago and however
helpful it might have been, it's something Alaskans can no
longer afford; ... therefore, we're leaning away from it."
MR. ALPER said what to replace that with and how to calculate
values into the future is "a manageable point of disagreement"
on which he believes the two bodies should be able to find
compromise. He said, "Then we can get out of this era of
cashable tax credits and move forward with a clear head, until
perhaps taking a closer look at taxes at some point in the
future, the way that this working group envisions." He stated
that the governor supports passage of HB 111 in some form that
would eliminate cash credits, and he reiterated that both
Version X and Version F would do that. He encouraged the Senate
and House to continue to talk to find a middle ground on the
valuation of losses - "on what some would call 'cost recovery'"
- so that the project can be completed in 2017 and [the
legislature can] move on to passing a fiscal plan.
MR. ALPER, in response to a follow-up question from Senator
Olson, said the only bill in the Second Special Session call is
HB 111. He said he is here to help everyone understand what is
in the different versions of the bill, but the House and Senate
must finish the job of reaching consensus. He offered his
belief that "we can get this bill done on Saturday." He said he
cannot say what happens after that.
MR. ALPER, in response to a question from Senator Olson, said he
thinks that in the absence of a formal carry-forward lease
expenditure program and a formal credit program, passing the 35
sections on which the House and Senate concur essentially would
mean passing the House version. He indicated this would cause
consternation in the industry, because it would leave
uncertainty as to what would happen to immediate and short-term
expenditures that are being made. He said he appreciates Chair
Tarr's explanation that the idea is to fix taxes with a
retroactive effective date - to assign whatever the appropriate
value is to a carry-forward once the next bill is passed;
however, he reiterated that not knowing what value will result
from spending creates uncertainty.
SENATOR OLSON asked if he is correct that the administration
would not be satisfied with 35 out of 40 [agreed upon sections].
MR. ALPER answered that the ultimate purpose of "leaving it
blank" was to force everyone back to the table to pass a bill as
soon as possible. He said, "As long as there's some confidence
- real confidence - that we're going to pass that bill and not
leave everyone hanging, I imagine people shouldn't have to worry
about it for too long." He acknowledged the difficulty of the
task. He said he is not sure "what the timing would be to
finish that project," and he concluded that he is not prepared
to [answer the question] on behalf of the administration as to
whether it would support Version X.
4:09:32 PM
REPRESENTATIVE JOSEPHSON, regarding the viability of Version X,
asked if the following scenario would be "workable": most of
Version F adopted; and carry-forward lease expenses expired at a
time-certain, but a time adequate to allow both chambers to work
on "the issues that we've compromised away that Representative
Tarr talked about."
MR. ALPER answered that the two versions that have already
passed, Version Q in the House and Version L in the Senate,
contrasted most in terms of the valuation ten years from now of
carried forward lease expenditures. He said [Version L] had
roughly $1.4 billion-worth of accumulated carry-forward [lease
expenditures], while Version Q had approximately $600 million,
which is a difference of about $800 million. Version X, he
said, is zero, because carry-forwards would be eliminated under
that version. He said Representative Josephson's question
relates to a loss of value over time. He stated that one main
reason for the gap that was in Version Q and L was that Version
Q held a provision that carry-forwards left unused for seven
years begin to lose 10 percent of their value per year, which
has been referred to as a "downlift" - the opposite of an uplift
- but he said he is not fond of the term. He concluded, "If
there were a different version of ... an erosion - something
that was not quite so onerous, maybe a longer time horizon or a
smaller percentage - and the Senate were amenable to that, that
would certainly go a long way toward splitting the difference
between the versions of the bill."
REPRESENTATIVE JOSEPHSON acknowledged that that would be one of
area of compromise, but clarified that he is talking about
adopting the Senate's proposed carry-forward lease expenditures,
but sun-setting the expenditures as a guarantee to the House
that "some of the serious restructuring that we believe is
necessary for an overhaul of the state's fiscal crisis would be
taken up in earnest next January."
MR. ALPER offered his understanding that Representative
Josephson is suggesting the Senate's structure of carry-forwards
valued at the rate of 35 percent until some point in the future
when they would go to zero. He said he thinks this plan would
create less "immediate" anxiety for those making investments
now, and it would certainly put pressure [on the legislature] to
"come back and resolve the tax issue."
REPRESENTATIVE JOSEPHSON clarified that it is not the position
of the House that "in perpetuity, there would be a zero-value
assigned to carry-forward lease expenditures ... to net
operating losses."
MR. ALPER said he thinks the House's position was made clear in
the version that initially passed the House: change the tax
rate; change certain credits that align the carry-forward value;
and have effective, nominal tax rates. He said if the House is
not going to push for those comprehensive changes now, the goal
would be to ensure that conversation happens in the future. He
said, "My understanding, from reading both versions of that
bill, is that the most important part is the working group." He
indicated that a working group means the two bodies will
continue the conversation. He mentioned the Legislative Budget
and Audit Committee bringing in consultants who will make
recommendations. He opined that the ground is ripe for a
conversation about Alaska's fiscal regime, in terms of oil and
gas, next year, and that is a two-part conversation concerning
fair share and the issue of raising revenue. He shared that he
thinks the two bodies are looking for "almost a verbal, public
commitment that that conversation is going to happen."
CHAIR TARR said advice from the Division of Legislative Finance
is that the remaining balance of the CBR cannot be used to pay
for next year's budget, because it is needed for "these cashflow
purposes." She said that causes her to be concerned about where
the state is today and what its remaining options are.
MR. ALPER said every year the budget provides language that
allows the state to borrow from the CBR within a given year for
cashflow purposes. This can be done as a loan that is paid back
with interest, without the three-quarter vote of the
legislature. He advised that the people who manage the state's
funds believe at least $2 billion is needed to meet any major
occurrence that might require "a sudden injection of state money
to resolve" it. When the balance drops below $2 billion, [those
in charge of the state's finances] are not comfortable
appropriating any more money out of the CBR. He added, "And
that's the number we'll reach at the end of the new fiscal year,
11.5 months from now."
CHAIR TARR expressed her hope that hearing that would help
people understand that although there are dollars left in the
CBR, they are not available for appropriation at this time.
4:18:16 PM
CHAIR TARR invited general discussion from committee members.
4:18:21 PM
SENATOR STEDMAN said one of the problems [the legislature] has
faced in changing from a gross tax to a net tax is finding
stability and predictability for the oil industry so that it can
make forecasts and have reasonable expectations on a rate of
return. He said when the legislature adopted the system known
as Alaska's Clear and Equitable Share (ACES) [passed in the
Twenty-Fifth Alaska State Legislature], the industry was not
able to comfortably forecast probability outcomes and felt ACES
put Alaska at a disadvantage in the board room when competing
for capital. He said the elimination of losses proposed in
Version X reminds him of where the state has been in terms of
the unpredictable nature of outcomes for both the industry and
the state. He said there are no cashable credits in a net
system - those are normally done on capital expenditures. He
stated the number one goal of "most of us" today is to eliminate
cashable credits, because they don't work as perceived. He
said, "There has been some substantial new oil found ... and gas
in Cook Inlet that could be targeted for some of these credits,
so it wasn't all lost money out the door, but clearly they don't
work in the long run in the industry and they're not using ...
[cashable credits] worldwide for that very ... [reason], so
we're looking at getting rid of them."
SENATOR STEDMAN stated that with the net system, there is always
the ability to deduct expenditures. Not having the ability to
carry forward substantially alters the rate of return and
"time/value/money profiles that the industry's expecting today"
on its past expenditures and development, as well as its future
development. He cautioned that telling the industry that the
legislature will come up with a proposed solution and
legislation in the future will lead to a lot of uncertainty. He
remarked on the predictability of "the unpredictability of the
legislature." He opined that going down this path would lead to
a substantial, negative impact in the oil basin, in terms of the
industry moving forward with additional projects.
SENATOR STEDMAN said he thinks the issue of "35 percent base tax
with a per barrel slider" is one that needs to be addressed,
with feedback from the three consultants that have been hired to
find solutions to "the mathematical irregularities that persist
in our system with this 35 percent base tax and the per barrel
slider." He said he does not feel that having the 35 percent
base tax in place will preclude the legislature from allowing
the net carry-forward of losses. He said some of the losses
will not be taken for a decade. He explained that one must have
revenue to "use your loss," and to do that, one must have oil.
He mentioned Smith Bay as one example of where there have been
billions of dollars in expenditures, and he said that "they're
not going to have production to take those expenditures against
for some time." He said some other companies will. He
indicated that this is apparent when looking at "a full cycle of
accounting on our profitability, both to the state and the
industry."
SENATOR STEDMAN warned that removing the ability to deduct
expenditure losses and telling the industry that the legislature
will fix that in the future would be disastrous and would lead
to "a substantial slowdown" greater than any seen in the past.
He said a projected $54 per barrel on oil would result in only
$1.5 billion in profit oil; at $45 per barrel there would be no
profits. He said, "So, nobody's cutting a fat hog in the butt
right now at these prices, and we're not in the net system
currently - we're in gross tax, minimum floor, until we get
somewhere close to $70 a barrel." He said that leads to some
complexity, but it also buys some time to sort out the issue.
SENATOR STEDMAN expressed uncertainty that Version X would have
the support of two-thirds of House members for a proposal he
described as "throwing the industry into the freezer and
shutting the door on them." He said the discussion is about
something that is "economically alarming," and he opined that it
is not productive to "ring a fire alarm of this magnitude" on a
bill with "little chance of getting the votes." He said the
legislature needs to end cashable credits but allow them to be
carry-forward. He posited that there is no need to do an
uplift, "downlift," or even "time them out." He mentioned the
consultants and the intertwining relationship of this issue and
other factors related to the state's tax code, and he said that
"it's very significant to the rate of return and net present
value of these projects." He talked about working with the
industry and the public to devise a fair handling of net
operating losses, but offered his understanding that eliminating
them is done nowhere in the world. He opined that Version X
would freeze out the industry and effective large oil fields,
and he recommended taking Version X "with a grain of salt" and
putting it "in the shredder."
4:29:07 PM
REPRESENTATIVE TALERICO expressed appreciation for the work
Chair Giessel and Chair Tarr have done, and he noted there are
quite a few points of agreement in both Version F and Version X.
He said he finds the full elimination of a net operating loss
system to be an impossible hurdle. He noted that the
consultant, Castle Gap Advisors, had presented findings to the
legislature in February 2017 and recommended a more global
perspective on the oil industry. Representative Talerico said
the market is competitive. He indicated that the consultant
advised that the state have a system under which operators could
recover all their costs, where net operating losses could be
carried forward and be recovered from production-based income.
He said the point is that every other basic tax system allows
for that. He emphasized that such a system "keeps us active and
flowing."
REPRESENTATIVE TALERICO offered his understanding that Version F
would allow those carry forwards and provide the ability to get
to production level and recover those costs. He said he thinks
that is what the consultant recommended. He said there must be
upstream investment to have downstream volume. He stated, "If I
was an investor, it may not necessarily terrify me, but to
remove this and have it potentially not ever be a consideration
again removes us from the game in my opinion." He said Alaska
is an oil-based economy, and even when working on
diversification, the state will rely a lot on its oil economy.
4:32:44 PM
CHAIR GIESSEL opined that if the legislature's focus had been on
repealing cash payments to oil companies, then it could have
resolved this issue back in April 2017. She said the discussion
has continued. She mentioned the cost of having special
sessions and said, "These absolutely were not needed." She said
the Senate, House, governor, and the public all agree that the
cash payments to oil companies need to be repealed. She said
more than half of the Senators are lifelong Alaskans, who were
here in 1986 and know what "the downturns" can feel like. She
expressed fear that the proposals in Version X would accelerate
the decline of the state's gross domestic product, which the
Department of Labor just reported has gone down four consecutive
years - an unprecedented length of time. She said the repeal of
the ability to use losses, as is provided in the federal income
tax code, would have an egregious effect on the state's major
industry and, by association, on families, businesses, and jobs.
She stated her belief that the state has experienced attrition
because of this [economic] decline. She said, "Our vision is
for our children and our grandchildren in this state, and we are
trying ... to reign in the spending on the cash payments. We
all agree to do this and we're dragging this out." She said
[the legislature] is wrestling over the rewrite of a tax policy,
on which it has not yet heard a complete presentation from its
consultants. She emphasized that the issues being considered
are complex, and the legislature has not had a full vetting of
them.
CHAIR GIESSEL said DOR put out a white paper in June 2017,
entitled "Valuing Carried Forward Lease Expenditures Versus Oil
and Gas Credits." The content of the white paper points out
that the losses are something companies will have to carry
forward until there is production; it never comes out of [the
state's] treasury; "they have to deduct it from their tax
payment when they have production." So, the loss deductions
require production. Further, she said when there is production,
the state will be getting royalties, corporate income taxes, and
property taxes. She stated, "Carrying these forward is actually
not as devastating as the House is trying to portray it."
CHAIR GIESSEL pointed out that the value of a dollar today is
not the same as the value of a dollar going forward, because
inflation erodes the value. The value of the deductions, by
carrying them forward 7-10 years, goes down significantly, but
it does not go down for the state. She explained, "By retaining
... this money that we're paying out right now in cash payments
- this money can be invested." She said the state has financial
investments currently that are making 7 percent return. She
said the carry forward losses are being portrayed as a credit
that someone would get today, but they are not at all the same;
they are significantly less lucrative.
CHAIR GIESSEL told Chair Tarr that the Senate members of the
Conference Committee on HB 111 continue to be interested in
compromise and in agreeing with the House to end cash payments.
She noted that the House had recessed until Friday, and she said
no action can be taken by the Conference Committee on HB 111
until the House has convened, passed a concurrent resolution,
and legitimized its conference committee. She expressed her
willingness to continue to discuss the differences of the Senate
and House versions with Chair Tarr.
4:39:13 PM
REPRESENTATIVE JOSEPHSON said he thinks fundamentally "we're
here because we lack a fiscal plan." He emphasized that the
state has financial problems but great resources on which it can
rely now. He expressed the possibility of figuring out a good
fiscal plan as being like putting chess pieces in the right
places. He expressed concern that without further discussion on
the proper rate for carry-forward lease expenditures in a way
that puts pressure on both bodies to act, "the other body would
not act." He said [the Senate] "refused to take up any new
revenue." He said the House had a hearing on a Senate bill,
which he indicated would "happen in 2018." He said tax
directors noted that although there may be $2 billion in the
CBR, the state cannot spend that money. He agreed with Chair
Tarr that a solution needs to be found as soon as possible, and
he said the House prepared that solution.
REPRESENTATIVE JOSEPHSON said he speaks candidly about his view
of "the other body's willingness to look at revenue," because of
comments made such as [Senator Stedman's] remark that Version X
should be put in the shredder. He explained, "Candor should be
met with further candor." He said, "I would note that there
were a number of laborers here; they rely on a robust capital
budget." He mentioned an amount of $130 million having been
spent on the capital budget. He emphasized the need for balance
and the request of his caucus for fairness. He said [the House]
is willing to postpone the discussion on reform of the oil tax
structure to 2018 and to compromise - for now. He expressed
concern that the Senate's unwillingness to discuss "the revenue
question" will continue on "with a look at the overall tax
structure."
REPRESENTATIVE JOSEPHSON said he thinks the House understands
that as a general rule, "the 100 percent of expenses are what is
customary," but the question is the rate at which the state
would contribute to those expenses. He said the House wants to
resolve cash credits. Regarding the comment [by Chair Giessel]
that this could have been done in April, he remarked that the
House had a desire to end cash credits in 2016. He said, "My
colleagues at the time were most eager, and we only finished
half the job last year." He said he understands that ultimately
the net operating losses would have to take some other form as
part of a profits-based system, and not having that could create
anxiety. He remarked on the time taken by the legislature,
saying, "We're the people that shop for Christmas on Christmas
Eve." He said he thinks a deadline by which serious discussions
must take place by both bodies would make it happen. He
expressed his wish that "something can bear fruit over the next
couple days," and he expressed appreciation for the hard word of
Chair Giessel and Chair Tarr.
4:44:07 PM
SENATOR OLSON applauded the efforts by all parties involved,
especially Chairs Tarr and Giessel, in trying to resolve this
issue. He said there certainly is a lot of distance between the
two bodies, but the people sent legislators to Juneau to do the
work. He encouraged a compromise that will end the hemorrhaging
of the state and, even though many people will not be happy with
the outcome, will offer some financial stability throughout the
state.
4:45:03 PM
CHAIR TARR summarized that both bodies agree on the need to end
cash credits. The Senate offered a measure wherein any unpaid
credits could be used against other liabilities to the state,
which would recuse the liability in a shorter duration of time,
which she said is a move in the right direction. She echoed
Representative Josephson that there is no intention on the part
of the House to not allow for recovery of losses. The point of
disagreement, she reviewed, is "how generous that will be." She
said, "Our concern is if it's too generous, it leaves us
vulnerable to pressure for continued changes, which will lead to
continued instability in the industry, which could be bad for
jobs and the economy." She indicated that the House stated
early on that its goal was to create a system that could be in
place for five to seven years, which may seem difficult to
accomplish. She pointed out that the Economic Limit Factor
(ELF) formula [passed in the Tenth Alaska State Legislature and
modified in 2005] was in place for decades, and it has only been
in the recent past that the legislature has been continually
changing the tax regime. She opined that the legislature should
be committed to a path that will resolve these issues for a
period of time that would allow a focus on other major issues,
such as education and health care.
CHAIR TARR said while she does not want to get involved in "a
blame game," there were instances where "people sent their
members home," which made it more difficult to address business.
She acknowledged the time it takes to bring 60 individuals
together with diverse points of view and work through processes.
In that regard, she said she thinks the entire legislature has
been working hard.
CHAIR TARR stated that the deduction is not a cash payment, but
it is a loss of revenue to the state that would otherwise go to
state services. She said, "The question for us, without
resolving this issue, is: What would a fiscal plan look like
going forward and where will the revenue come from?" She talked
about receiving multiple resolutions for the last three years
from businesses, nonprofits, and local governments pleading the
legislature to come up with a fiscal plan. She talked about the
importance of the industry to the state and need to craft a
system with more predictability. She said when Senate Bill 21
[passed in the Twenty-Eighth Alaska State Legislature] was
passed, the legislature did not contemplate $27 per barrel
prices and the new normal being a low-price environment, because
$60 per barrel seemed like a low price at that time.
4:49:24 PM
CHAIR TARR said while it is true that inflation affects the
price of a dollar into the future, it is also true that "we
don't depreciate those assets." She said 100 percent of the
cost of a capital expenditure can be recovered at the time that
the losses are applied. Conversely, equipment sold cannot be
sold at the same price at which it was purchased on day one.
She said the state does receive royalties, but people consider
that in different ways - some as government take and some as
"the part that Alaskans own and get a royalty for." She said it
is true that Alaska receives corporate income tax, but it is a
much-reduced dollar amount relative to what the severance tax or
petroleum production tax has been over the years. She said
property tax largely goes to local communities. Regarding an
overall fiscal plan for state government and the source of those
state dollars, she stated, "We think that the revenue from our
petroleum tax will remain a key component of that."
CHAIR TARR echoed Chair Giessel's remarks about continuing to
work toward a resolution. She said she remains optimistic. She
thanked those in attendance. She reemphasized the hard work
that is being done by the legislature throughout the year, and
she said she wants the public to know that work is done not just
during the meeting process. She encouraged any members of the
public interested in the issue to visit her office.
[HB 111 was held over.]
| Document Name | Date/Time | Subjects |
|---|---|---|
| CCSHB111 Work Draft Version X 7.10.17.pdf |
JHB111 7/12/2017 3:00:00 PM |
HB 111 |
| CCSHB111 Work Draft Ver F.pdf |
JHB111 7/12/2017 3:00:00 PM |
HB 111 |
| CCSHB 111 Work Draft Ver. X, Summary 7.11.2017.pdf |
JHB111 7/12/2017 3:00:00 PM |
HB 111 |
| CCSHB 111 Work Draft Version X, Sectional Analysis.pdf |
JHB111 7/12/2017 3:00:00 PM |
HB 111 |
| HB 111 Version F Sectional Summary .pdf |
JHB111 7/12/2017 3:00:00 PM |
HB 111 |
| HB 111 Version F Sectional Summary .pdf |
JHB111 7/12/2017 3:00:00 PM |
HB 111 |